What High School Never Taught You (And Should Have): Managing Your Checkbook

One of the best money management habits you can create is keeping accurate records of bank activity in a checkbook. Many people use a combination of cash, ATM and debit cards to make their purchases. Managing the flow of money in and out of your bank account can help maintain control of your finances. Balancing your checkbook is the most efficient way to develop money management skill and control your personal finances.

Most people do not take the time out to balance their checkbook because it can be considered a tedious task. Some people assume that they can mentally keep up with their finances with the help of receipts. Others feel that because they use cash or never write checks that a checkbook is not right for them. On the contrary, many marriages and friendships end over financial issues, and America has a visible poverty epidemic, not only for poor people, but for wealthy people too. Not having the money can be an issue, or not properly managing the money could be it. Taking the time to keep updated records concerning finances can eliminate most of the financial issues that arise.

Balancing a checkbook is actually simple. The best time to write in a transaction is when the transaction is taking place. If you are making a deposit into your account, write it as a transaction in the checkbook. Verify the amount of the deposit, and check to make sure they are in the correct account, checking or savings, and make sure that your grand total after the deposit matches. That is the perfect time to easily spot an error. The error could be in the checkbook’s records, or a honest mistake by the bank teller. There could be a delay on the availability of the funds, or there could be an unknown freeze on some funds. Addressing these issues immediately could prevent inaccurate calculations later.

When making a withdrawal or completing a purchase with your debit or ATM card, write in the amount spent in exact amounts. Be sure to include any fees or separate charges that may be assessed to your account. ATM fees, overdraft fees, and monthly banking fees should be debited from the balance of the checkbook when they are taken out of the account to prevent additional fees.

When comparing your checkbook against your monthly banking statements, look for any errors. By updating the checkbook each time you make a withdrawal or make a purchase with your debit or ATM card, it will be easier to point out any inconsistencies and be able to address them quickly without fumbling through receipts and tracing back your spending habits by memory. If a problem or error is discovered, having a balanced checkbook can make handling that problem easier to solve. A checkbook that is regularly updated will itemize financial transactions. Each transaction can be easily traced back months, even years back to identify hidden problems. As another benefit, fees for insufficient and account overdrafts can be avoided by knowing the exact amount of funds in the bank account at all times.

5 Responses to What High School Never Taught You (And Should Have): Managing Your Checkbook

  1. I remember in my high school you had to actually take accounting class to learn how to manage a checkbook. That’s pretty pathetic given how easy it is to actually do. Yet few people take the time or just get lazy leaving it to the computer to take care of. That’s too bad because your finances are far too important to slack off.

  2. […] Guru @ Debt Free Blog writes What High School Never Taught You (And Should Have): Managing Your Checkbook – Balancing your checkbook is the most efficient way to develop money management skills and […]

  3. […] Guru @ Debt Free Blog writes What High School Never Taught You (And Should Have): Managing Your Checkbook – Balancing your checkbook is the most efficient way to develop money management skills and […]

  4. […] How to Budget and Still Have Fun in Las Vegas posted at Simple Budget Blog. Debt Guru presents What High School Never Taught You And Should Have: Managing Your Checkbook posted at Debt Free Blog. Rich presents Why Being Rich Is Not The Same As Being Upper Middle Class […]

  5. […] Guru @ Debt Free Blog writes What High School Never Taught You (And Should Have): Managing Your Checkbook – Balancing your checkbook is the most efficient way to develop money management skills and […]